George Fort filed a complaint with the U.S. Department of Labor alleging he was subjected to adverse actions by his employer, Tennessee Commerce Bancorp., in violation of the Sarbanes-Oxley Act (SOX). See 18 U.S.C. 1514A. Click here.

Following an investigation, the Dept. of Labor ordered that Fort be reinstated to his former position as CFO of the bank along with full back pay. The bank refused and the Dept. of Labor sought enforcement of its order in the Middle District of Tennessee.

On May 19, 2010, Judge William Haynes of the Middle District of Tennessee granted the Dept. of Labor’s motion for preliminary injunction and ordered that Fort be reinstated to his former position. See Solis v. Tennessee Bancorp., Inc., 2010 WL 2010944 (M.D. Tenn. May 19, 2010).

The court rejected the bank’s arguments that the Dept. of Labor’s order violated the bank’s due process rights “because the preliminary order results in a permanent and irreparable loss to the [bank] of the permanent deprivation of payments and wages pending a final resolution of the Secretary’s proceedings against the [bank].” In this regard, the court noted that the bank was regulated by the SEC and sought investors in publicly traded stock. Accordingly, the court held that “[i]n this context, the costs of compliance with the Secretary’s preliminary order based upon factual findings is a regulatory cost of doing business.”

UPDATE: On May 25, 2010, the 6th Circuit has issued an order staying the injunctive relief ordered by the Middle District of Tennessee. Order Thus, Mr. Fort’s reinstatement has been put on hold for the time being.

Many employers have adopted no-fault attendance policies. Under the typical policy, employees are assessed points for violations of the attendance policy without regard to the reason for the absence. See, e.g., Bauer v. Varity Dayton-Walther Corp., 118 F.3d 1109-10 (6th Cir. 1997).

Occasionally, a no-fault attendance policy will collide with an employee’s use of FMLA.

A FMLA regulation specifically states that employers are prohibited from counting qualifying leave as part of a no-fault leave policy. 29 C.F.R. 825.220(c). And a termination based only in part on an absence covered by the FMLA, even in combination with other absences, may still violate the FMLA. Cavin v. Honda of America Mfg., Inc., 346 F.3d 713, 726 (6th Cir. 2003)

Thus, if an employee is terminated due to a no-fault attendance policy and is subsequently able to demonstrate that he had points assessed against him that should have been protected under the FMLA, then the employee will be entitled to damages and/or reinstatement to his former position. See 29 U.S.C. 2617.